The central bank of Jamaica plans to begin testing the state digital currency in December, with a launch scheduled for next year. This was announced by the Minister of Finance of Jamaica Nigel Clarke (Nigel Clarke) during a speech at the annual meeting of parliament, which discussed issues related to the state budget. The Jamaican government believes it is necessary to accelerate the transition to digital currency for a more effective economic recovery after the crisis and pandemic.
A government stablecoin could significantly increase the access of the Caribbean population to financial services. However, Clarke immediately made a reservation that the digital currency of the Central Bank of Jamaica should not be confused with cryptocurrencies, which are issued privately and are not controlled by regulators. The government digital currency will be pegged to the Jamaican dollar at a 1: 1 ratio and will be considered legal tender. In addition, with this asset, businesses will be able to make faster and more cost-effective payments without intermediaries.
Individuals and organizations will carry out settlements, as well as pay for goods and services using a mobile phone. According to Clark, after the launch of the Central Bank’s digital currency, tens of thousands of Jamaicans will be able to become full-fledged participants in the country’s financial sector. Earlier, the Governor of the Bank of Jamaica, Richard Byles, said that over the past several months, the Central Bank of Jamaica has been actively discussing the implementation of this initiative with the Cabinet of Ministers. Jamaica has been working on a government stablecoin since early last year.
In May, the Bank of Jamaica announced that it is exploring the digital currency’s capabilities and functioning in a new regulatory sandbox for financial technology projects. The central bank then began hiring specialists to develop and test the digital Jamaican dollar. Recall that last fall, the Central Bank of the Bahamas has already launched its own state-owned stablecoin Sand Dollar to reduce economic costs and improve the country’s tax system.